LONDON, Nov 6 (Reuters) – An output cut by six top rare-earth producers in China has spurred a modest rise in prices and is helping to steady a hard-hit market, but a continued glut of illegal output will likely cap any rebound.

Prices of 17 rare-earth elements used in high-tech sectors such as electronics, defence and renewable energy have been sliding over the past four years, hit by heavy oversupply.

Last month, the country’s top producer China Northern Rare Earth High Tech Corp and five other main suppliers said that due to weak prices, they would produce around 10 percent less than their 2015 government-set output targets.

China is the world’s dominant producer of rare earths, accounting for 90 percent of global supplies. “The cuts caused a short-term bump (in prices), but the real problem is that it’s only a small drop in the ocean,” said David Merriman, senior analyst at consultancy Roskill Information Services in London.

“The amount of illegal production that is still being produced is strong enough to keep downward pressure on pricing.”

An index compiled by the Association of China Rare Earth Industry, based on the value of all rare earths produced in China, has increased by about 12 percent over the last four to six weeks, but has levelled off.